DAL Law Firm: Seller financing how-to
Introduction
Seller financing is an alternative real estate transaction method where the seller acts as the lender, allowing the buyer to make payments directly to them over time rather than securing a traditional mortgage. If you own multiple pieces of real estate, incorporating seller financing into your estate plan can streamline the management of your properties. This post will guide you through the process of seller financing and how it can simplify your estate planning.
What Is Seller Financing?
Seller financing, also known as owner financing, occurs when the seller provides the buyer with a loan to purchase the property, bypassing conventional mortgage lenders. The buyer typically makes a down payment, signs a promissory note, and repays the seller over time, with interest, as agreed upon in the terms. Seller financing can be particularly useful in real estate deals where buyers may have difficulty obtaining traditional financing.
How Seller Financing Works
In a seller-financed transaction, the seller retains a secured interest in the property until the loan is paid off, often through a deed of trust or mortgage. The terms of repayment, including the interest rate, payment schedule, and consequences of default, are detailed in the promissory note. This method gives sellers more flexibility in managing the sale and provides an income stream from the property.
Benefits of Seller Financing in Estate Planning
For those with real estate in multiple states, seller financing can simplify estate planning in several ways:
- Income Continuation: Seller financing allows the seller to receive steady payments over time, which can be beneficial for estate planning, especially if structured within a Revocable Living Trust.
- Avoiding Probate: By using seller financing and placing the promissory note and deed of trust within an revocable living trust, your estate can bypass probate in multiple states.
- Control and Flexibility: Seller financing gives you control over the sale terms and the ability to tailor the deal to suit your estate planning goals.
Including Seller Financing in Your Estate Plan
When incorporating seller-financed properties into your estate plan, it’s important to document the loan terms clearly and ensure they align with your overall estate planning strategy. A Revocable Living Trust can hold the promissory note and deed of trust, making it easier for your heirs or successor trustees to manage the ongoing payments without the need for probate in each state.
Conclusion
Seller financing can be a valuable tool for simplifying estate planning when you own real estate in multiple states. It provides flexibility, steady income, and helps avoid probate, especially when integrated with an revocable living trust.
If you would like to consult with our office regarding our services and how we can be of assistance, please feel free to reach out to us by phone or text at (206) 408-8158.
You can also learn more about our services by visiting our website:
https://www.dallawfirm.com
Contact us:
19803 1st Avenue S.
Suite 200
Normandy Park, WA 98148T (206) 408-8158
F (206) 374-2810
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